The Basic Trade

A share is a holding of a company that varies in value based on the desire or need for that particular company’s goods or services.

As a shareholder, your net worth increases and decreases based on taking a short position (selling) when values are high and a long position (buying) when prices are low.

As long as the stock or security is in your possession, the change in value is considered unrealized gain or loss because you cannot measure it in liquid assets (cash).

When most commodities traded on the market are on a strong upward trend for a period of time, this is referred to as a bull market. Should value take a sharp downward swing and continue on that path, it is called a bear market.

If no such trend is recognized, and the value of stocks and securities is fairly even, this is referred to as flat.

The Basic Trade